Italy may need to exit the euro zone and revert to its own national currency to resolve its debt crisis, thereby forcing the break-up of the euro zone, Nouriel Roubini wrote in an opinion piece in the Financial Times on Friday, cnbc.com reports. Roubini argued that with yields on its sovereign debt hovering around the 7 per cent mark, market access may become limited for Italy. A forced restructuring of its debt could help solve some of its issues, but it would not address other issues that hamper the Italian economy such as a lack of competitiveness, a large current account deficit and lower gross domestic product, he wrote. Unless a lender of last resort for “stressed” countries within the euro zone can buy the sovereign debt, the higher yields would reach unsustainable levels, Roubini argued.
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